Bigger Isn't Necessarily Better Lessons from the Harvard Home Builder Study

by Abernathy, Frederick; Baker, Kermit; Colton, Kent; Weil, David

• ISBN13: 9780739172889
• ISBN10: 0739172883
• Format: Hardcover
• Copyright: 2011-12-09
• Publisher: Lexington Books

Summary

Bigger Isn "t Necessarily Better: Lessons from the Harvard Home Builder Study examines the performance and operation of the US home building sector in the period of the great building boom of the 2000s. In contrast to the many books that have focused on the financial side of the housing sector prior to the Great Recession, the book examines the operational side of the industry and what did ”and more importantly did not ”happen during the period of unprecedented growth in the sector. Despite the rapid growth of very large, national home builders during the boom years from 1999 to 2005 and the consolidation of the industry that accompanied it, Bigger Isn "t Necessarily Better argues that major home builders did not improve their operational performance, from their use of information and communication technologies, to their coordination and management of construction at the work site. In fact, the authors find that those builders in markets where prices ”and profits ”were growing fastest during the boom did the least in terms of innovations in their operational practices. The result is that the sector had a long way to fall as the industry collapsed about them.These insights arise from analysis of a detailed survey conducted by the authors of large home builders at the peak of the building boom. The survey provides an unprecedented look into the performance of major homebuilders at the peak of the homebuilding boom.

Author Biography

Frederick Abernathy is Gordon McKay Research Professor of Mechanical Engineering and Abbott and James Lawrence Research Professor of Engineering in Harvard University's School of Engineering and Applied Sciences, Kermit Baker is senior research fellow at Harvard University's Joint Center for Housing Studies and chief economist for the American Institute of Architects. Kent Colton is president of The Colton Housing Group and is a senior fellow at Harvard University's Joint Center for Housing Studies. David Weil is professor of economics and Everett W. Lord Distinguished Faculty Scholar at Boston University School of Management "

Table of Contents

preface	p. VII
Home BuildingùIs Bigger Better?	p. 1
The Home Building Boom
The Seeds of Consolidation
The Growing Dominance of Big Builders
Conventional Wisdom about Scale
The Virtuous Circle Hypothesis
Organization of the Book
Studying The Home Building Industry	p. 15
Building the Machine for Living
Focus on Entry-Level Homes
Measuring Local Market Competition
Survey Coverage and Content
Structure of the Survey
Big Builders At The Corporate Level	p. 27
Builder Performance During the Boom
Securing Capital for Expansion
Land Assembly Strategies
Corporate Branding and Customer Satisfaction
Conclusion
Labor And Subcontracting Practices	p. 39
The Construction Manager Model
Benefits and Costs of Improved Coordination
Coordinating On-Site Activities
Performance at the Construction Site
Conclusion
Advanced Operational Practices	p. 59
Emergence of the Third Supply Channel
Shifting Builder Priorities
Implementation of Advanced Practices
The Role of Local Market Conditions
Market Characteristics and Builder Performance
Conclusion
Information And Communication Technology	p. 71
ICT Background
Communicating with Customers
Home Builders and Technology Use in the Back Office
Home Builders and Technology Use on the Site
Using Technology to Estimate Costs
Using Technology to Coordinate with Subcontractors and Suppliers
The Importance of Sharing
Factors Discouraging Greater Use of Technology
Conclusion
Lessons About Builder Scale And Performance	p. 85
Challenges of Improving Operational Performance
The Importance of Local Markets Revisited
Disentangling the Effects of Size and Location
Can Bigger Get Better?
Gaining Advantage From Scale	p. 93
Improve Subcontractor Coordination and Workforce Quality
Increase Standardization and Preassembly of Components
Leverage the Power of Information Technology
Streamline Supply Chain Management and Logistics
Managing Risk in the Twenty-First Century
Joint Centre Advisory Panel For The Harvard Home Builder Study	p. 105
Survey Responses To ICT Questions	p. 107
References	p. 109
Index	p. 115
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